Inflation and deflation have been around for as long as goods and services have been traded, and the long-term historical record shows that there were nearly as many periods of deflation as there were inflation until the 20th century, when inflation began to dominate. There are many potential explanations for this relatively recent dominance of inflation; however, the growth of the banking industry and the accompanying growth in credit availability, as well as the end of the gold standard, are likely to have played major roles.

Some of these relationships are quite well understood, others less so. This paper outlines, by no means exhaustively, some of the structural and cyclical drivers of inflation and provides some detail on how these drivers may influence prices. It continues to offer suggestions for action.